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Feds ignoring small biz
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April 25, 2001: 7:42 a.m. ET
GAO to Congress: Agencies not meeting SBREFA rules
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NEW YORK (CNNfn) - Small business owners have long complained of having their concerns ignored by the federal government. A new study, released Tuesday by the General Accounting Office, lends some support to that claim.
For the past five years, since the Small Business Regulatory Enforcement Fairness Act was passed by Congress, some federal agencies have not abided by the protections written into that law for small businesses.
The act, also called the Red Tape Reduction Act, was designed to curb the devastating effect some federal regulations have on small businesses. It required federal agencies to study the cost of new regulations and whether they would impair the ability of small businesses to compete.
Small business owners say they are almost always less capable of complying with new regulations than their big business counterparts. In the past, small businesses have suffered reduced profits, been forced to lay off employees and have sometimes been driven out of business completely.
Report supports further action by Congress
According to GAO, several federal agencies continue to pass regulations without making an assessment of how they will affect small businesses. Among the violations was a 1996 decision by the National Marine Fisheries Service, part of the Commerce Department, to reduce the quota for summer flounder catches off the East Coast.
North Carolina commercial fishermen complained the regulation would badly damage their industry. Most of them would reach the new, lower quota by some time in spring. The rule would have put most small fishermen in North Carolina out of business for several months of the year.
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If used as Congress intended, this process can allow the goals of proposed rules to be preserved while agencies tailor them into less costly alternatives that better fit the needs of the small business community.
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U.S. Sen. Christopher "Kit" Bond |
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A court later found the Commerce Department's actions violated the law and ordered the agency to complete the review.
The Environmental Protection Agency, too, failed to review how one new regulation banning the use of CFC urethane foam would effect 40 different types of small businesses.
The GAO said the full promise of the law has not been realized and suggested that Congress may need to further delineate how the agencies should quantify the effects on small business and at what point the impact on small business becomes a "significant economic impact." The GAO, in short, said Congress could push further compliance by setting more clear standards by which the agencies have to regulate themselves and setting a threshold at which an analysis must be conducted by the agencies.
U.S. Sen. Christopher "Kit" Bond (R-Mo.), who ordered the report be conducted, said he believes small businesses should be included in all federal rulemaking because the regulations will be better designed and businesses won't suffer as many negative effects.
"If used as Congress intended, this process can allow the goals of proposed rules to be preserved while agencies tailor them into less costly alternatives that better fit the needs of the small business community," said Bond, chairman of the Senate Small Business Committee. "A little bit of effort by the agencies can go a long way to keep small businesses growing and creating new jobs."
Bond added that the GAO report of agency failures to abide by the Small Business Regulatory Enforcement Fairness Act suggests that Congress may need to amend the law and tighten the requirements placed on federal bureaucrats to uphold small business protections in the statute. 
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